First Apps, then Maps: What lies ahead for Apple in India?
New Delhi: While the maiden visit by Tim Cook as Apple CEO can be defined as fully encrypted from the word go, his arrival here shows the importance the company holds India in as a
New Delhi: While the maiden visit by Tim Cook as Apple CEO can be defined as fully encrypted from the word go, his arrival here shows the importance the company holds India in as a smartphone market, only next to China, which Cook visited before coming to India.
In its latest report based on a survey earlier this month, global market research firm Morgan Stanley said that India will overtake the US as the second-largest smartphone market next year.
“We model a 23 percent compounded annual growth rate for Indian smartphones through 2018 and the country should account for 30 percent of the global unit growth over the next two years and become the second-largest market in terms of units," the report added.
In its latest report, market research firm Gartner on Thursday said that while the global sales of smartphones to end users totalled 349 million units in the first quarter of 2016, “changing smartphone market dynamics" has led Chinese brands to emerge as the new top global brands."
“Apple's 'upgrade programme' in the US has helped sweeten its flagship iPhone 6s to drive sales in its largest smartphone market. Apple is also exploring ways to refarm second-hand iPhones coming through the program in emerging markets,” said Anshul Gupta, research director at Gartner, in the report.
So here is Cook, exploring emerging markets, including India. After revealing plans for an iOS app design and development facility in Bengaluru and a new office in Hyderabad that will focus on development of maps for Apple products, what next can be on his plate when he meets Prime Minister Narendra Modi this weekend?
“Full-fledged manufacturing would be quite far off. As of now, we understand it would be more of bringing research and development into the country. Though, Modi had invited Apple CEO to start manufacturing, this may not happen just now. However, the roadmap could be in that direction,” Faisal Kawoosa, lead analyst with CyberMedia Research (CMR), told IANS.
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Will Cook raise the issue of allowing Apple to import and sell refurbished iPhones at a cheaper price in India?
“A nod to import and sell refurbished iPhones at a cheaper price in India would put Apple in a very advantageous position. At a time, when its revenues have taken a hit, selling its products in mid and low-price segment would give the company an upper hand and in the meeting with the Prime Minister, this issue could be in Apple's priority list,” Kawoosa explained.
According to Vishal Tripathi, research director at global market consultancy firm Gartner, if Cook raises the refurbished iPhones issue with the prime minister, this will give Apple a slot in the mid and low-price segment where the actual war is currently taking place in India.
“Apple's largest manufacturing partner in India Foxconn is looking to set up a manufacturing base in the country, preferably in Pune, Maharashtra,” Tripathi told IANS.
A Morgan Stanley report also said that while the high-end smartphone market in India is small, macroeconomic and demographic trends -- and an appetite for 4G services -- will lead users to upgrade to better smartphones over time.
“We expect the high-end market to unfold like it did in China, where Samsung and Apple dominate. Our survey indicates Samsung is leading in India with 46 percent user share and slightly higher purchase intentions," it pointed out.
"Apple needs to build its brand as, surprisingly, half of survey respondents were not aware of the company. However, this means Apple has the most room for upside as our survey shows it could double share in the $400 segment to 40 percent," the study said.
“From consumer's point of view, there is a need to have a neutral certification and testing facility for refurbished market to grow. This is beyond Apple,” Kawoosa noted.